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TMI Blog2019 (6) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... natures on the share transfer forms were that of the appellant. We are further of the opinion that no attempt was made by the appellant to get the signatures appended in the share transfer form compared with the specimen signatures kept with Company. Verifying and comparing the signatures of the appellant on the share transfer forms with the signatures of the appellant on other documents like PAN Card, Passport, Bank signatures are immaterial when specimen signatures of the appellant are kept with the Company. The primary evidence for comparing the signatures is the specimen signatures kept with the Company. Allegation that no opportunity was given to the appellant to cross-examine the Registrar and Transfer Agent is patently erroneous and an afterthought. No such stand was taken by the appellant before the AO in this regard nor any such application was made to this effect. The fact that the transfers were made at various places in Gujarat is immaterial. What is material is the signature of the appellant on the shares transfer certificates. The contention that the signatures of the witness are different in the share transfer forms cannot be accepted at this stage. Such stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange Board of India (hereinafter referred to as, SEBI ) imposing a penalty of ₹ 4 crores for failure to make disclosures under Regulations 13(3), 13(4A) read with 13(5) of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (hereinafter referred to as, PIT Regulations ) and Regulations 29(2), 29(3), 30(2) and 30(3) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as SAST Regulations ). 2. The facts leading to the filing of the appeal is, that in the year 1994 Parikh Herbals Pvt. Ltd. was incorporated as a Company. In 2006, the appellant was issued 12,65,150 shares of ₹ 10/- each. The shares of the company were suspended for trading on Bombay Stock Exchange (BSE) and Pune Stock Exchange from 1997 which continued till the year 2012. During this period, it is alleged that the Company suffered heavy losses and, consequently on November 15, 1997 the appellant resigned as a director. On January 13, 2012, the suspension of the company was revoked by the BSE and on July 27, 2012, the Company s name was changed to Safal Herbs Ltd. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. We have heard Mr. Kunal Katariya, the learned counsel for the appellant alongwith Mr. Neerav Merchant, Mr. Bharat Merchant, Mr. Kunal Kothary and Mr. Kumar Desai, the learned counsel for the respondent. Before us, the learned counsel for the appellant made the following submissions :- a. The share transfer form was for transfer of the ₹ 10 share certificate which could not be transferred as in the meanwhile, the shares were split from ₹ 10 to Re. 1/- per share and, consequently, the appellant was entitled to receive the split share of Re. 1/- each and only thereafter the Re. 1/- share certificate could have been transferred through the share transfer form to a third party, which in the instant case, was not done and, therefore, the alleged transfer of shares was wholly illegal. b. The appellant had never sold the shares and the same had been misplaced / lost. c. The signatures on the share transfer forms were not that of the appellant and the same are forged. The opinion of the expert provided by the appellant was not considered by the AO and was brushed away casually. d. The stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atures on the share transfer forms were that of the appellant. We are further of the opinion that no attempt was made by the appellant to get the signatures appended in the share transfer form compared with the specimen signatures kept with Company. Verifying and comparing the signatures of the appellant on the share transfer forms with the signatures of the appellant on other documents like PAN Card, Passport, Bank signatures are immaterial when specimen signatures of the appellant are kept with the Company. The primary evidence for comparing the signatures is the specimen signatures kept with the Company. If for some reason, the specimen signatures was not available with the Company then only the signatures of the appellant on the PAN Card, Passport etc. would become relevant. In the instant case, no steps were taken by the appellant to verify and compare his signatures with the specimen signatures kept with the Company. Thus, no reliance can be placed on the expert opinion provided by the appellant. For the same reasons, the allegation that no opportunity was given to the appellant to cross-examine the Registrar and Transfer Agent is patently erroneous and an afterthought. No su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. The sale made by the appellant resulted in the decrease in his shareholding which exceeded the benchmark limit as prescribed under Regulation 29(2) of the SAST Regulations. Such disclosures were required to be made which was not done. Thus, the appellant had violated the aforesaid Regulations. 14. A penalty of ₹ 4 crore has been imposed under Section 15A of the SEBI Act. The AO while imposing the maximum penalty took into consideration the judgment of the Hon ble Supreme Court in the matter of SEBI vs Roofit Industries Ltd. [(2016) 12 SCC 125] in which it was held that the factors contemplated under Section 15J cannot be taken into consideration once a violation of the Regulations were found. 15. In our opinion, the imposition of a penalty of ₹ 4 crores on the aforesaid ground is not correct. We find that the decision of the Hon ble Supreme Court in Roofit Industries Ltd. (supra) has been held to be no longer a good law by a larger bench of the Hon ble Supreme Court in Civil Appeal No. 11311 of 2013 Adjudicating Officer, SEBI vs. Bhavesh Pabari decided on February 28, 2019 wherein the Hon ble Supreme Court has held that Roofit Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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